Once your offer on a home has been accepted things can become hectic. You may be setting meetings, arranging for your financing and to have the house inspected. In addition to that you will be making your moving plans. It may seem quite overwhelming when you compound all this with your regular responsibilities.
When you work with me we will have reviewed all the closing costs and responsibilities prior to viewing homes. However, with all the commotion of buying a home it can be easy to forget budgeting for closing costs. In order for your sale to complete there are fees owed on, or by, closing day. Most of these fees are in addition to, and separate from, your mortgage loan.
Experts recommend budgeting at least 1.5% of the purchase price toward closing costs.
I have listed most of these expenses below. Please note: These expenses are approximations only – they may vary depending on suppliers, and are prone to frequent changes.
Deposit at time of offer - $5,000 or more
Mortgage application – Typically not more than several hundred dollars. May be waived
Property inspection (optional but recommended) – $400. Due at the time of inspection.
Property Appraisal – $300-$400. May be required by the bank especially if putting less than 20% down
Legal fees (including disbursements) – Expect to pay between $900 -$1100 for a real estate lawyer, but cost varies depending on the extent of services provided. Due at closing.
Property site survey - If there is not one available you may want to pay for one if you plan to put up a fence. $350.- $450
Land Transfer Tax – Currently it is 1% on first $200,000 and 2% on each $100,000 thereafter. Example- $400,000 house would be a total of $6,000.
Interest adjustment – Varies with mortgage amount and terms. Due at closing.
Property tax/pre-paid utilities adjustments – Your lawyers office will caculate this for you.
Mortgage default insurance – Varies depending on the principal amount of your mortgage. Due at closing.
Property/fire insurance – Varies according to coverage level, region and property type. Due by closing.
Title insurance – Around $200. Due by closing.
HST - On new homes or homes over a certain value. Please visit http://www.taxtips.ca/realestate.htm due by closing if applicable.
Don’t forget to also budget for Moving costs. For additional information please call or email me.